I currently run an AppleTV v1 (with upgraded internal HDD) over optical to a Rotel RA-11. It works fine for me - I can rip to lossless on my iMac, update the ATV - and then play cd-quality music into the Rotel - all controlled by Apple's remote.

However, I suspect the ATV won't last forever and there is going to come a point where have to replace the system.

Do you have any recommendations for similar HDD-based systems that can be used to store cd-quality rips and play via optical into an external amp? It seems that most solutions in the market are either very expensive - or assume you have a stable wired/wireless network to stream over?

Just a tip: if you're not planning to keep the Apple TV for long, sell it on eBay. Check the current going rates. Because Apple TV3 cannot be jailbroken, Apple TV 1 & 2 are selling for ridiculous amounts, upto £200 in some cases.